Westinghouse Agrees to Build Indian Nuclear Power Plant

WASHINGTON, Jun 13 2012 (IPS) - The U.S.-based Westinghouse Electric has signed a preliminary deal to build a nuclear power plant in India, signalling the first significant forward movement on a contentious civilian nuclear deal agreed between the two countries in 2008.

“I think this should put at rest some of the interpretations and some of the confusion that was prevailing in the immediate aftermath after we signed the nuclear accord,” Foreign Minister S.M. Krishna, in Washington for bilateral talks, stated here on Wednesday.

“Nuclear commerce is now beginning to expand, and we hope more Indian and American companies will be involved in the course of the coming months.”

Secretary of State Hillary Clinton made the Westinghouse announcement while standing alongside Foreign Minister Krishna at Wednesday’s start to the third round of the India-U.S. Strategic Dialogue here in Washington.

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Back in 2008, under George W. Bush, a groundbreaking but highly criticised agreement between the two countries resulted in the United States pushing for an exemption for India under international agreements.

India, which successfully tested a nuclear weapon in 1998, has never signed the Nuclear Non-proliferation Treaty, an international accord aimed at limiting the spread of nuclear weapons that is normally a prerequisite for a country to begin trading in the material necessary to produce nuclear energy.

In return for pushing for the exemption, the United States had assumed that its companies would be able to capitalise on India’s plans to increase its nuclear power capacity 15-fold. But Indian legislation on liability protection has stymied the effort, despite New Delhi having reserved two sites for U.S. installations.

Another U.S.-based company, GE Hitachi, has been in talks with India for years, but has yet to arrive at any substantial result.

According to a release by Westinghouse, the new project would be a 1,000-megawatt reactor, to be built at Mithivirdi in the western state of Gujarat. Although the site has long been under consideration for a nuclear installation, the New Delhi government had previously suggested that it was rethinking the project due to concerns following the Fukushima disaster and renewed anti-nuclear public campaigns.

Westinghouse is now a unit under the Japanese Toshiba Corporation, and its release on the Mithivirdi project was quick to point out several of the improved safety features of the proposed technology, characterising it as “the safest, most advanced” design.

“Rather than relying on active components such as diesel generators and pumps,” the release notes, the new plant would use “the natural forces of gravity, natural circulation, and compressed gases to keep the core and containment from overheating.

“Even with no operator action and a complete loss of all on-site and off-site AC power, the (plant) will safely shut down and remain cool for seven days without the need for auxiliary water supply.”

Westinghouse says that its technology runs around half of the nuclear plants in operation today.

The agreement represents only the very first step in going forward with the Mithivirdi project, with the deal constituting what is known as an early works agreement.

In her announcement, Clinton highlighted the thorny regulatory issues within India that have kept U.S. companies out of India’s nuclear sector since the 2008 agreement – a delay that, for some, has cast a pall over the strength of the newly burgeoning U.S.-India relationship.

According to Clinton, the agreement commits “both sides to work toward the preliminary licensing and site development work needed to begin construction of new reactors in Gujarat.”

She further specified, “There is still a lot of work to be done, including understanding the implications of nuclear liability legislation.”

This is a reference to an Indian bill voted on in August 2010 that seeks to define liability in the event of a nuclear disaster.

Although the legislation was a requirement under the 2008 U.S.-India nuclear deal, Washington has since repeatedly voiced concern that the law does not comply with international standards that, among other things, ensures that liability for such an event pertains solely to the operator of a nuclear plant.

Passage of the bill itself was met with fierce resistance in the Indian Parliament, particularly by left-leaning parties that have since lost significant political power.

“It is no secret to date the India-U.S. civil nuclear agreement hasn’t met U.S. commercial expectations due to the Nuclear Liability Law passed by Parliament, which essentially shuts out U.S. companies,” U.S. Congressman Steve Chabot complained in May.

While U.S. nuclear companies are private corporations, those in several other countries enjoy state backing. This makes liability an increased concern both for U.S. companies and for the Indian public, still healing from the disastrous 1984 Bhopal gas leak at a U.S.-owned company.

Thus, even as U.S. companies have stewed over the wait, several other countries have raced to the Indian market. According to an Indian official currently in Washington, New Delhi is actively engaged in talks with Russia, France and South Korea on nuclear power, with agreements to be inked by the end of the year.

Despite Foreign Minister Krishna’s optimism on the future of U.S.-India nuclear cooperation, the Strategic Dialogue ended Wednesday with little substantive progress on how regulatory reform would proceed within India, a matter that could still sink the Westinghouse agreement.

In an e-mailed clarification to IPS, Westinghouse spokesperson Scott Shaw noted that the new agreement “is limited to preliminary siting and licensing activities … and the nuclear liability issue will need to be addressed before signing any final agreements for the total project.”